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Future development and poverty reduction tied to gains in renewable energy, says IDB President

GUATEMALA- The countries of Latin America must increase their development of renewable energy sources and improve energy efficiency to ensure future development and the ability to meet the demands of the low-income majority, said IDB President Luis Alberto Moreno today.

In contrast to the discussions sparked by the 1970s energy crisis, the region’s countries today are in the center of the current debate on the subject, both due to their growing energy needs and because of potential role of some of them as major suppliers of alternatives to fossil fuels, he said.

Moreno was speaking at the opening of a seminar Sustainable Energy for Sustainable Development that was held in conjunction with the 48th Annual Meeting of the IDB’s Board of Governors in this Central American capital. The formal sessions begin on Monday, March 19. The seminar was sponsored by the German government.

The IDB president disputed those who maintain that the present interest in renewable energy is a transitory phenomenon. 

First, said Moreno, advances in technology have reduced the costs of renewable energy sources, in the case of solar energy, from $200 to $3 per installed watt. In Mexico, the state of Oaxaca will put into operation a 250-megawatt wind farm in 2008 while Brazil is building two wind power projects with a combined generating capacity of 425 megawatts.

Moreover, not just Brazil, but other countries in the region, have considerable potential to produce ethanol and other biofuels, said Moreno.

In the second place, he said, there is a growing consensus over the dangers of global warming, which could seriously affect Latin American countries. Twelve countries have or are in the process of adopting goals for the use of biofuels in response to this threat, he added.

Moreno described a new IDB initiative in which the Bank will help to clear away roadblocks to the generation and use of renewable energy and work to develop mechanisms through which entities in industrialized countries receive credit in exchange for financing projects that reduce greenhouse gas emissions in the countries of Latin America.

In her statement, Guatemalan Minister of energy and Mines Carmen Urizar said that her government has accepted the challenge to gradually replace fossil fuels with renewable energy. She added that access to energy is crucial for countries where a large proportion of the population has unmet needs. “Eliminating poverty is the priority objective of our energy policy,” she said.

A representative of the German government told seminar participants that a key European Union goal is the adoption of sustainable energy. But early action is needed to avert “enormous damage,” said Karin Kortmann, state parliamentary secretary for Germany’s Ministry of Economic and Development Cooperation and IDB governor.

Kortmann conceded that Latin America only generates 4 percent of the world’s greenhouse gasses. But the push for renewable energy is still crucial for the region because of its vulnerability to climate change. Moreover, she continued, a forward-looking energy policy is politically necessary for Latin America as a way to ensure energy independence and as necessary precondition to reducing poverty.

According to Kortmann, Germany is one of the world’s leaders in solar, wind and biodiesel power generation.

Energy demand in Latin America is expected to increase 75 percent by the year 2030, and electrical generating capacity will need to increase 144 percent. Studies indicate that non-hydrocarbon energy sources such as wind power, hydroelectric and geothermal power could provide from 23 percent to 47 percent of the region’s electricity demand by that same date. 

For the second year in a row, the IDB’s Annual Meeting is carbon neutral by offsetting greenhouse gas emissions associated with the event.These emissions are calculated on the basis of each participant’s long distance and local travel, accommodations and conference venues.

The IDB is offsetting these emissions by financing a project to build a small hydro plant, without the use of a dam, to help improve the qwualityh of life of indigenous communities living in the Vaupés area of Colombia, near the border with Brazil.

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